Annual Report 2007-8 - The British School at Rome

N OTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 20081. ACCOUNTING POLICIESBasis of PreparationThe financial statements have been prepared in accordance with the Statement ofRecommended Practice ‘Accounting and Reporting by Charities’ (SORP 2005),applicable accounting standards and the Charities Act 1993. The accounts havebeen prepared on a going concern basis, under the historical cost convention asmodified by the revaluation of certain fixed assets and using the following policies.a) Incoming ResourcesAll income is gross without deduction for related expenditure.Legacies, including payments on account of legacies, are recognised in theaccounts when there is reasonable certainty of receipt and the amount can beascertained. Grants for general support, research, scholarships or fixed assetsare recognised on a receivable basis and are deferred only when the donor hasimposed pre-conditions on the use of the grant.The School recognises the intangible value of accommodation provided torecipients of awards and scholarships as a credit to residential income and acharge to grants and scholarships.b) Resources ExpendedLiabilities for expenditure are recognised in accordance with the accruals concept.Grants payable for research and scholarship fall due only when suchresearch is undertaken or upon attendance at the School and accordingly areaccounted for over the period of research or attendance. More details on thenature of awards are shown in the Annual Report. Expenditure for researchand academic studies, residential research programmes, library andpublications disclosed within charitable activities includes departmentalsalaries. A proportion of salary costs is allocated to governance costs based onthe approximate time expended on such activities.Support costs are allocated in full to expenditure incurred on charitableactivities. The majority of costs are allocated on a pro rated basis over thedifferent activities undertaken by the School, excluding activities which arefinanced by restricted funds. Support costs which are related to a specificactivity are allocated to that activity in full. The Trustees consider this to bethe most appropriate method of allocation.c) PensionsThe School contributes to the UK Universities Superannuation Scheme forcertain of its employees. The Universities Superannuation Scheme is adefined benefit scheme which is externally funded. The assets of the schemeare held in a separate trustee-administered fund. It is not possible to identifyeach institution’s share of the underlying assets and liabilities of the schemeand hence contributions to the scheme are accounted for as if it were adefined contribution scheme in accordance with FRS 17. The chargerecognised within the Statement of Financial Activities is equal to thecontributions payable to the scheme for the year.d) Staff Termination FundThe School provides for deferred pay which is due to Italian employees whenthey leave the employment of the School. The amount payable is calculated inaccordance with existing Italian legal requirements and the Italian nationallabour contract. The charge is recognised within the Statement of FinancialActivities.e) Fixed AssetsFixed assets other than library books are disclosed at cost. Depreciation isprovided by the School to write off the cost less the estimated residual valueof tangible fixed assets over their useful economic lives as follows:Computers25% straight lineMotor vehicles25% straight lineOffice equipment20% straight lineFurniture and fittings20% straight lineThe Library is considered to be a heritage asset and is stated in the balancesheet at an attributed value based on its insured value. The annual cost ofadditions to the Library, which is equivalent to an annual depreciation rate ofapproximately 10% straight line, is charged to the Statement of FinancialActivities to represent the notional write down in the useful economic life ofthe Library.f) InvestmentsInvestments are carried at market value with any unrealised gains and lossesbeing included in the Statement of Financial Activities allocated betweenrestricted and unrestricted funds.The proportion of investment income relating to restricted funds is retainedfor use within restricted funds.g) Foreign CurrencyForeign currency conversion for the balance sheet is at year-end rates,except where the balances are covered by forward contracts to meet knownfuture liabilities, when the contract rate is used. During the year thetranslation is at average rates on a month to month basis, or forwardcontract rate as applicable. Exchange gains or losses are treated as otherincome or expenditure in the Statement of Financial Activities where theycannot be directly related to individual activities. Where exchange gains orlosses can be directly related to individual designated or restricted projectsthe gain or loss is attributed to the relevant fund.h) Cash Flow StatementThe School is exempted by FRS 1 (revised) from preparing a cash flowstatement.i) FundsDetails of the funds of the School, how they have arisen and their use aregiven in notes 17 and 18.46